To continue growing businesses must embrace an innovation mindset. One way for a business to advance is by running research and development (R&D) projects. When Canadian businesses adapt and adopt new innovative strategies, they can realize competitive advantages over their domestic and international competitors. It is important to note that R&D activities are not exclusive to research-oriented companies and large businesses with extensive budgets but can also help small-to-medium-sized companies (SMEs) gain market advancement.
Government funding programs can support Canadian businesses in their innovation goals through grants, loans, and tax credits by offsetting research and development activities. Read this blog to discover federal programs currently available that can help your business access funding for research and development projects.
Five federal government funding programs that can help your Canadian business with eligible research and development projects are listed below. If you are reading this article in the future, a listed funding program may not be open. Stay up to date with all programs by viewing our Research and Development Funding Directory to find all programs currently open for intake.
Canadian Grants and Loans for Research and Development
Innovative Solutions Canada (ISC) is an initiative that provides government grants and procurement contracts to stimulate technology research, development, and commercialization. The program’s Challenge Stream and Testing Stream help Startup businesses and SMEs overcome technology testing and development hurdles so they can produce competitive products and services to meet global demand.
- Funding Amount: SMEs can access up to $150k for proof-of-concept projects, and up to $2M for prototype development, and may also be awarded a government contract.
- Applicant Eligibility: For-profit Canadian incorporations with <500 employees are eligible to apply. 50%+ FTEs and senior executives must be in Canada.
The National Research Council of Canada’s Industrial Research Assistance Program (NRC IRAP) is a Canadian government funding program designed to accelerate the research and development projects from Canadian innovators. Businesses that are developing and implementing process improvements are the primary recipients of research funding through NRC IRAP. However, large-scale technology adoption projects that lead to new capabilities may also be considered.
- Funding Amount: Eligible applicants can access up to 60%-80% of internal technical labour and subcontractor expenses.
- Applicant Eligibility: Incorporated and financially stable businesses with 1-500 employees are eligible to apply.
The Mitacs Accelerate funding program pairs SMEs with applicants to overcome innovation challenges. Eligible interns have a Masters, PhD, or postdoctoral fellowship and use their expertise to complete research and develop tools, models, technology, or solutions to solve the small business’ challenges.
- Funding Amount: The program provides support up to $15,000 for each four- to six-month internship with a financial contribution of $7,500 from the partnering organization. The cluster stream supplies additional funding if the business offers 6+ internship periods to 3+ interns. Funding includes intern stipend and research costs.
- Applicant Eligibility: Incorporated, for-profit businesses, and select non-profits across Canada. All industries and sectors are supported; preference is given to research and development projects in innovation.
The Strategic Innovation Fund (SIF) is a Canadian government funding program uniquely directed at Canada’s industrial and technology sectors. It offers financial contributions (both repayable grants and non-repayable loans) valued at up to 50% of project costs with the purpose of promoting investment into activities that drive sustained productivity and economic benefits.
- Funding Amount: The SIF program focuses on projects requesting at least $10 million in contributions. This means a minimum project size of $20 million.
- Applicant Eligibility: Although the SIF program is open to all businesses, potential applicants should keep in mind that this is an extremely competitive program. While your company may be eligible for funding, successful applicants must demonstrate high growth potential and the ability to drive innovation.
The Scientific Research and Experimental Development (SR&ED) program helps Canadian businesses receive tax credits for research and development projects. Over 20,000 SR&ED applicants claim more than $3 billion in tax incentives annually.
- Funding Amount: Tax credits can cover up to 69% of labour and overhead costs, 36% of contractor costs, and 45% of material costs. All expenses must be related to the activities required to resolve a technological uncertainty, obstacle, or challenge
- Applicant Eligibility: The federal SR&ED program is offered Canada-wide combined with provincial funding. SR&ED is one of the largest tax incentive programs and is available to a wide range of Canadian businesses including individuals, trusts, membership of a partnership, Canadian-Controlled Private Corporations (CCPC), and other corporations.
Learn More About Canadian Funding Programs
The Canadian government funding programs for research and development listed in this blog are intended for SME businesses. If your business does not meet the requirements of a given program, you can gain access to our free Canadian Startup Business Resources.
If your business wants to start accessing funding for R&D, please connect with the Mentor Works, a Ryan Company team to learn which active program could fit your business’ needs, and subscribe to our Weekly Funding Newsletter to stay updated with the latest government funding news.
If you would like access to exclusive details about the programs listed in this blog, please register for an upcoming webinar in which our professional team discusses high level details regarding government funding opportunities for Canadian businesses.